The Association for Financial Professionals (AFP) released their 2019 Payments Fraud and Control Survey, according to a press release by the organization. Key findings for 2018 include:
- 82% of business organizations reported an incident of payments fraud
- 87% of business with $1 billion+ in revenues reported payments fraud incidents during the same time period
- 80% of companies reported business email compromise (BEC) fraud
- 54% of organizations reported BEC related losses
In keeping with the eCommerce fraud trends 2019 theme, the data shows new fraudster tactics and increased fraud attack volume threaten enterprise merchants with significant financial losses.
In the release, Jim Kaitz, President and CEO of AFP, stressed the need for businesses to do more do protect themselves against eCommerce fraud.
“Payments fraud is a persistent problem that is only getting worse despite repeated warnings and educational outreach,” he said. “Treasury and finance professionals need to learn the latest scams and educate themselves—and perhaps more importantly—their work colleagues on how to prevent them.”
Fraud Impacts more than the Bottom Line
The report itself stresses the need for merchants to take the effects of fraud seriously. It states that even if the dollar value loss is low, there are ancillary effects to consider.
As an example, it cites data breaches of customers’ personal information. Breaches may not have a direct impact on a business’ revenue. However, the loss of consumer trust and need to handle the PR and legal aftermath can have a significant impact.
“AFP has noted that, historically, financial losses incurred as a result of payments fraud activity are not extensive,” the report states. “This, however, does not suggest that payments fraud can or should be taken lightly. Nonfinancial impacts of successful payments fraud activity can be crippling. In addition to adversely affecting an organization’s reputation, payments fraud can expose confidential information and require significant clean-up efforts.
Businesses Must do more to Protect Themselves
The report stresses the need for merchants to do more to protect themselves. It states that the drive to learn how to prevent eCommerce fraud must be a company-wide effort. All relevant stakeholders must take the problem seriously and educate themselves on how they can help their organization do more to minimize their organization’s vulnerabilities.
“Organizations and their treasury/finance staff cannot afford to be complacent; they all must be vigilant. Fraudsters seek to attack targets that lack protection,” the report states. “While not every organization can protect itself completely, having a variety of protective measures in place will likely frustrate fraudsters and they’ll move on to easier targets.”
To read the survey or learn more about the Association for Financial Professionals, visit the AFP website.